Amazon’s Holiday App Proves Urgent Need for Congressional Action to Level Playing Field

Arlington
,
VA
-
12/7/2011

Page Content

The
Retail Industry Leaders Association (RILA) reacted to a new smartphone App from
Amazon.com that encourages holiday shoppers to use brick and mortar stores as
showrooms to then purchase merchandise online from inside the
store. Central to this tactic is Amazon’s continued practice of
using a pre-internet loophole to avoid state sales tax collection, a move that
gives them an unfair competitive advantage over Main Street retailers.

“Retailers compete on
price 365 days a year, and at no time is that competition hotter than during
the make-or-break holiday shopping season. However, by continuing to
evade collecting state sales taxes, Amazon’s exploitation of a pre-Internet tax
loophole is resulting in a 6-10 percent perceived price advantage over their
competitors on Main Street,” said Katherine Lugar, executive
vice president of public affairs.

“Amazon’s aggressive promotion of its Price Check App shows the
lengths they are willing to go to exploit this tax loophole, and is a stark
reminder of why Congress needs to act to protect retailers on Main
Street. A failure to act is an implicit endorsement of a subsidy of
Amazon, a subsidy that distorts the free market and puts jobs on Main Street at
risk,” said Lugar.

RILA supports bipartisan legislation introduced in the House and in the Senate
that would level the playing field and force all retailers to compete under the
same rules. In a hearing last week before the House Judiciary Committee,
Congressman Mike Pence (R-IN) summed up the need for Congressional action by
saying:

“I don’t think Congress should be in the business of picking
winners and losers. Inaction by Congress today results in a system today that
does pick winners and losers.”

“Main Street retailers have been forced to compete on an uneven
playing field for too long. Retailers cannot afford another holiday season
where they are forced to compete on an uneven playing field,” added
Lugar.

Retail
Industry Leaders Association (RILA) is a trade association of the largest and
most successful companies in the retail industry. Its member companies
include more than 200 retailers, product manufacturers, and service suppliers,
which together account for more than $1.5 trillion in annual sales. RILA
members operate more than 100,000 stores, manufacturing facilities and
distribution centers, have facilities in all 50 states, and provide millions of
jobs domestically and worldwide.